Technical analysis of USD/CAD for 18/08/2010

Support levels: 1.0300, 1.0250, 1.0200Resistance levels: 1.0500, 1.0586, 1.0650On a 4-hour chart, the USD/CAD currency pair is pulling back further from the upper limit of the downward channel, and now, it is forming “Flag” probably. It is expected that breakout of 1.0300 will cause a drop to 1.0250. However, if 1.0400 is breached, the intraday view will become neutral. If the ascendant motion keeps on, a breach of the resistance level of 1.0500 will aim USD/CAD at 1.0586. In mid-term outlook, USD/CAD has seemly shaped a bottom at the mark of 0.9930. In addition, taking into account bullish divergence in daily and weekly MACD, the view of the pair remains bullish amid the reversal of the downtrend from 1.3063. It is awaited that USD/CAD will move upwards to Fibonacci correction level of 38.2 from 1.3063 to 0.9929 on 1.1126 with the next target at Fibonacci correction level of 61.8 to 1.1866. More analysis at instaforex.com